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LSI Reports First Quarter 2008 Results 

  

First Quarter 2008 Revenues Exceed Guidance

 
MILPITAS, Calif., April 23, 2008 – LSI Corporation (NYSE: LSI) today reported results for its first quarter ended March 30, 2008.
 

First Quarter News Release Summary

  • First quarter 2008 revenues of $661 million, exceeding guidance
  • First quarter 2008 GAAP* net loss of 2 cents per share
  • First quarter 2008 non-GAAP** net income of 10 cents per diluted share, exceeding guidance
  • First quarter operating cash flows of $96 million
  • Cash and short-term investments of $1.2 billion
 

Second Quarter 2008 Business Outlook

  • Projected revenues of $650 million to $680 million
  • GAAP* net loss in the range of 0 to 8 cents per share
  • Non-GAAP** net income in the range of 8 to 12 cents per diluted share

*  Generally Accepted Accounting Principles.
**  Excludes goodwill impairment, stock-based compensation, amortization of acquisition-related intangibles, restructuring of operations and other items, net, purchase accounting effect on inventory, loss on write-down of equity securities and acquired in-process research and development. It also excludes the income tax effect associated with the above mentioned items.
 

Strength in Storage Semiconductors Drives Better Than Expected Seasonal Performance

 
First quarter 2008 revenues were $661 million, a 42% increase year-over- year compared to $465 million reported in the first quarter of 2007, and down 11% sequentially compared to $741 million reported in the fourth quarter of 2007 [1]. Adjusting for the sale of the mobility business, first quarter revenues declined 7% sequentially compared to the fourth quarter of 2007. The first quarter revenue decline was less than expected on better than expected sales of semiconductors for storage applications.
 
First quarter 2008 GAAP* net loss was $14 million or 2 cents per share, compared to first quarter 2007 GAAP net income of $30 million or 7 cents per diluted share. First quarter 2008 GAAP results compare to fourth quarter 2007 GAAP net loss of $2 billion or $2.87 per share, which included a $2 billion non-cash charge for impairment of goodwill. First quarter 2008 GAAP net loss included a net charge of $78 million from special items, including $55.7 million of amortization of acquisition-related items, $4.6 million of restructuring costs, and $17.8 million of stock-based compensation expense.
 
First quarter 2008 non-GAAP** net income was $64 million or 10 cents per diluted share, compared to first quarter 2007 non-GAAP net income of $44 million or 11 cents per diluted share. Fourth quarter 2007 non-GAAP net income was $94 million or 13 cents per diluted share.
 
Cash and short-term investments totaled approximately $1.2 billion at quarter end. LSI also announced today that it has completed the purchase of approximately 147 million shares of its common stock for approximately $1 billion under two repurchase authorizations.
 
"Our first quarter results mark the third consecutive quarter of revenues that have exceeded expectations and reflect continuing strength in our core business," said Abhi Talwalkar, LSI president and chief executive officer. "Stronger than expected sales of our SAS and SAN silicon partially offset the effects of normal seasonality while the longer-term benefits of our strategic steps and sharp focus on storage and networking continued to grow."
 
"During the quarter we also won significant new silicon designs in the hard disk drive and server spaces and announced an innovative new family of single-chip, low-cost content inspection processors for security and networking applications which is receiving strong interest," added Talwalkar.
 
Bryon Look, LSI chief financial officer, said, "In the first quarter we continued to generate strong operating cash flows and effectively managed our expenses, delivering a solid financial performance. Our balance sheet remains strong and despite continuing macro-economic uncertainty we remain confident in the health of our business."
 
[1] The Company merged with Agere Systems on April 2, 2007.
 

LSI Second Quarter 2008 Business Outlook

​ ​GAAP* ​Special Items ​Non-GAAP**
Revenue $650 million to $680 million $650 million to $680 million
Gross Margin 37 – 40% $45 to $55 million 45 – 47%​
Operating Expenses $270 million to $290 million $35 to $45 million $235 million to $245 million​
​Net Other Income ​$0 million ​ $0 million​
Tax​ Approximately $8 million​ ​ Approximately 8%​
Net (Loss)/Income Per Share​ ($0.08) to ($0.00)​ ($0.12) to ($0.17)​ $0.08 to $0.12​
Diluted Share Count​ ​640 million ​ 645 million​

Capital spending is projected to be around $15 million in the second quarter and approximately $60 million in total for 2008.

Second quarter depreciation and software amortization is expected to be approximately $25 million.

 

LSI Conference Call Information
 

LSI will hold a conference call today at 2 p.m. PDT to discuss first quarter financial results and the second quarter 2008 business outlook. Internet users can access the conference call at http://www.lsi.com/webcast. Subsequent to the conference call, a replay will be available at the same web address. 

Forward-Looking Statements: This news release contains forward-looking statements that are based on the current opinions and estimates of management. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. Factors that could cause LSI's actual results to differ materially from those set forth in the forward-looking statements include, but are not limited to: timely completion of our planned acquisition of the hard disk drive semiconductor business of Infineon Technologies AG; our reliance on major customers and suppliers; our ability to keep up with rapid technological change; our ability to compete successfully in competitive markets; our ability to achieve anticipated synergies following our acquisition of Agere Systems; fluctuations in the timing and volumes of customer demand; the unavailability of appropriate levels of manufacturing capacity; our ability to successfully and timely transition our assembly and test operations to third parties; and general industry and market conditions. For additional information, see the documents filed by LSI with the Securities and Exchange Commission, and specifically the risk factors set forth in the company's most recent report on Form 10-K. LSI disclaims any intention or obligation to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.

 

About LSI

 
LSI Corporation (NYSE: LSI) is a leading provider of innovative silicon, systems and software technologies that enable products which seamlessly bring people, information and digital content together. The company offers a broad portfolio of capabilities and services including custom and standard product ICs, adapters, systems and software that are trusted by the world's best known brands to power leading solutions in the Storage and Networking markets. More information is available at http://www.lsi.com.
 

Editor's Notes:

 
  1. All LSI news releases (financial, acquisitions, manufacturing, products, technology, etc.) are issued exclusively by PR Newswire and are immediately thereafter posted on the company’s external website, http://www.lsi.com.  
  2. LSI and the LSI & Design logo are trademarks or registered trademarks of LSI Corporation.
  3. All other brand or product names may be trademarks or registered trademarks of their respective companies.

  

 Q1 2008 Financial Tables (PDF, 27KB)